British Columbia Budget Report 2023

Last updated: Mar. 7, 2023 

British Columbia Budget 2023 Highlights

The 2023 British Columbia Budget was released by Finance Minister Katrine Conroy, on February 28, 2023.

The Budget is anticipated to result in a surplus of $3.592 billion for 2022 – 2023, and a deficit of $4.2 billion for the 2023-2024 budget year.

No corporate or personal tax rate changes were made, but several credit changes were introduced.

Here we’ll provide a summary of key highlights for British Columbians across the province.

Corporate Tax

Corporate tax rates for British Columbia were not changed and remain to be (as of January 1, 2023):

Corporate Income	B.C. Rate	Combined Provincial + Corporate Rate
General	12%	27%
M&P	12%	27%
Small Business*	2%	11%

*tax rate on the first $500,000 of active business income, shared amongst an associated group.

B.C. Farmers Food Donation Corporate Income Tax Credit

The B.C. Government extended the B.C. Farmers Food Donation Corporate Income Tax Credit:

• The program has been extended to January 1, 2027
• It is a non-refundable tax credit to encourage farmers to donate certain agricultural products they produce in B.C. to registered charities that are engaged in the provision of food to persons in B.C. without charge (food banks for example) or it must operate a school meal program
• The credit can be claimed on T2 returns for tax years ending after February 16, 2016
• The credit is 25% of the eligible amount of the farmer’s qualifying gifts of agricultural product for the tax year
• The credit must be claimed within five tax years of the donation of agricultural product being made

Interactive Digital Media Tax Credit

The B.C. Government extended the Interactive Digital Media Tax Credit:

• The program has been extended to September 1, 2028
• It is a refundable tax credit to encourage corporations to employ individuals to develop interactive digital media products in B.C. (video games, educational software, etc.)
• The credit is 17.5% of the eligible amount of eligible salaries and wages paid for the tax year
• The credit must be claimed no later than 18 months after the end of the tax year in which the eligible salaries and wages are incurred
• There are no carry-back or carry-forward provisions for this credit

Personal Tax Measures

There are no changes to personal tax rates, however the brackets and credits have been indexed to inflation (2.3% in 2022 and 6% in 2023).

Taxable Income	Tax Rate
$0 to $45,654	5.06%
$45,654.01 to $91,310	7.70%
$91,310.01 to $104,835	10.50%
$104,835.01 to $127,299	12.29%
$127,299.01 to $172,602	14.70%
$172,602.01 to $240,716	16.80%
Over $240,716	20.50%

B.C. Farmers Food Donation Personal Income Tax Credit

The B.C. Government extended the B.C. Farmers Food Donation Personal Income Tax Credit:

• The program has been extended to January 1, 2027
• The non-refundable tax credit is available to farmers or their spouses or common-law partners who make a gift of agricultural product to registered charities that are engaged in the provision of food to persons in B.C. without charge (food banks for example) or it must operate a school meal program
• The credit can be claimed on T1 returns for tax years ending after February 16, 2016
• The credit is 25% of the eligible amount of the farmer’s qualifying gifts of agricultural product for the tax year and
• The credit must be claimed within five tax years of the donation of agricultural product being made

Personal Affordability Measures

B.C. Renter’s Tax Credit

The B.C. Renter’s Tax Credit was introduced in Budget 2023:

• The credit will provide up to $400 per year in support to eligible renters
• The credit will be income-tested and be available to renters with adjusted family income below $60,000 (income-tested and reduced to zero after net income reaches $80,000)
• Eligible renters can start claiming the tax credit on their 2023 T1 Income Tax Return

B.C. Family Benefit

The maximum annual payment for the B.C. Family Benefit has been increased for families who earn less than $27,354 of adjusted net income:

Effective July 1, 2023, payments of:

• $1,750 for first child,
• $1,100 for second child,
• $900 for each subsequent child
• For families with adjusted net income over $27,354, these amounts are phased out

The minimum annual payments are also increased for families who earn between $27,354 and $87,533.

Effective July 1, 2023, payments of:

• $775 for first child,
• $750 for second child,
• $725 for each subsequent child

Climate Action Tax Credit

Effective July 1, 2023, the maximum annual payments for the B.C. Climate Action Tax Credit increased for adults to $447 and $223.50 for a spouse or common-law partner, and to $111.50 per child.

Other Tax Measures

Carbon Tax

The B.C. 2023 Budget announced an annual increase of carbon tax rate of $15 per tonne of carbon dioxide equivalent emissions (in line with federal requirements)

The increase is effective April 1, 2023, and will continue until rates reach $170 per tonne in 2030.

The Budget included a reduced carbon tax rate for qualifying commercial greenhouse growers, on purchases of natural gas/propane used for heating and generating CO2 for increased crop productivity.

• Eligible growers include greenhouses that produce vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, or landscape nursery plants.
• These greenhouse growers must have earned gross revenue of $20,000 from sales of eligible crops (or anticipate making that in the next 12 months).

Provincial Sales Tax (PST)

The Budget introduced changes or updates to PST as follows:

• The inclusion of online marketplace facilitators and online marketplace services as taxable even when the services include non-taxable services.
  • These changes were intended to clarify the tax treatment of these situations, and closely aligns with the federal administration of GST/HST.
• A clarification that the federal luxury tax is not included in the taxable purchase or lease price, for PST purposes.
• The exemption of Automated external defibrillators (AEDs), including kits containing AEDs, and parts and services for AEDs, from PST, as of March 1, 2023

Property Transfer Tax (PTT)

Starting January 1, 2024, the purchases of eligible new rental buildings will be exempt from the further 2% property transfer tax that is applied to the fair market value of properties exceeding $3 million.

Eligible properties must be non-stratified and held as a rental (on a monthly basis, or longer) for at least 10 years.

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